The IMF, the credit crunch and Iceland: A new fiscal saga?
Working paper
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http://hdl.handle.net/11250/95175Utgivelsesdato
2009Metadata
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- CME Working Papers [113]
Sammendrag
Iceland was badly hit by a fundamental mismatch between the assets and international
liabilities of her banking system, with severe consequences for the welfare of the
population. The country now has an IMF program. The paper asks three questions of
the program: is it too tight? Is the balance of payment’s target appropriate? How will
the country cope with the potentially huge transfer problem associated with the now
frozen external liabilities of the failed Icelandic banks? The paper notes several
problems and argues that an appropriately structured and expanded fiscal policy is
needed, together with burden sharing between Iceland and the international
community